omkostnader

Omkostnader is the Danish term for costs or expenses, referring to resources consumed by an organization to produce goods or services. In accounting, omkostnader are typically shown as deductions from revenue on the income statement and are considered to reduce profit. They cover ordinary operating expenditures rather than capital investments, which are capitalized and depreciated over time.

Omkostnader can be classified in several ways. Fixed costs remain constant in the short term (for example, rent and salaries of permanent staff), while variable costs vary with activity level (for example, raw materials and direct labor). Direct costs can be traced to a specific product or project, whereas indirect costs (overhead) support multiple activities and must be allocated. Other distinctions include operating costs, which arise from core business activities, and financial costs, such as interest. Some discussions also consider marginal, average, and semi-fixed costs.

In Danish accounting practice, omkostnader are recognized in the period in which they are incurred and reduce profit. Capital expenditures are not recorded as omkostnader when incurred; instead, they become assets and are expensed through depreciation (afskrivninger) over the asset’s useful life.

Businesses use omkostnader in budgeting and decision making, including pricing, cost control, and profitability analysis. Understanding the cost structure helps assess break-even points and the impact of changes in volume, price, or cost on overall profitability.